Some are up and some are down as tech earnings season shifts into high gear today. Among the popular companies with earnings reports already out,
have been among the winners, while
slumped as the high expectations for their earnings were tough to beat.
Before I take a look at the valuations for stocks that are due to report after the close, I want to examine how the stock prices of some companies that reported quarterly results on Wednesday have fared. We've seen mind-boggling volatility as stocks with positive reactions are up more than expected, and stocks that disappointed are down more than expected.
eBay beat the Street,
reporting second-quarter EPS of 21 cents, well above the consensus estimate of 18 cents.
My model showed eBay 35.1% undervalued going into the report, and a close this week above its five-week modified moving average at $35.27 would be a positive. eBay is trading strong today, above its June high at $40.94.
beat Street expectations by a penny, reporting third-quarter EPS of 35 cents. Guidance for F5's fourth quarter was lowered to a range of 29 cents to 30 cents from 37 cents to 38 cents a share on inclusion of stock-based compensation. Shares of F5 traded down by $2.75 in after-hours action to $47.00, which was below my weekly value level for the stock of $48.37.
My model showed F5 just 3.8% undervalued going into its earnings report, which limited the upside potential for shares on the news. Shares have been crushed today, with F5 trading as low as $41.03.
topped analysts consensus estimates for EPS of 44 cents with results of 47 cents, but shares traded down $1.25 to $31.90 in aftermarket trading. My model showed Lam was 10.4% overvalued heading into the report, so the weakness was understandable. Shares continued lower on Thursday, down to $29.56.
bettered third-quarter Street estimates of 25 cents with EPS of 28 cents. Guidance was mixed, but the stock gained $1.33 in after-hours trading to reach $37.42. My model showed Qualcomm 11.2% undervalued before its report, with a neutral zone between a monthly value level at $34.18 and a weekly risky level at $36.02, so this display of strength above those levels indicates Qualcomm has potential to move up to its June high of $38.52. Shares traded just above $38.82 this afternoon.
bested the Street by a penny, with second-quarter EPS of 27 cents. The stock declined $3.28 in after-hours trading to $25.72, just below my weekly value level at $26.11. My model showed VeriSign 29.1% undervalued as it approached its earnings release. The stock traded as low as $23.79, below its February low of $24.48. This made shares more than 40% undervalued, according to my model.
Thursday's Post-Close Earnings Roster
are due to report quarterly earnings Thursday. They're also members of the Philadelphia Semiconductor Index; since the end of April, I have projected that this index would have strong leadership characteristics.
At Wednesday's close, the SOX was up 26.6% off its April 29 low. This emphasizes the importance of that weekly moving average crossover for the SOX that I followed for weeks, which was confirmed at the weekly close on July 8. On that date, the five-week modified moving average for the SOX closed above its 200-week simple moving average for the first time since November 1998, which confirmed the market leadership of the semiconductor stocks. Since confirming the crossover on July 8, the SOX has moved up 7.7%.
This means that semiconductors could have a tougher time beating estimates and providing guidance positive enough to power stocks higher without a modest pullback, similar to that experienced by Intel. But the pattern is a strong indication that semiconductor shares should be purchased on weakness.
Broadcom, which provides semiconductors for wired and wireless broadband communications services, is expected to report EPS of 25 cents per share. My model shows Broadcom 49.4% undervalued, but with an overbought weekly chart profile. A negative reaction to earnings would cause a test of my monthly value level at $38.57. A positive reaction to earnings could fuel continued upside to my quarterly risky level at $43.28.
( RSAS) faces Street expectations of 12 cents EPS. My model shows that RSA, which provides ways to establish online identities and access rights for Internet applications and devices, is 51.3% undervalued. Its weekly chart profile would shift to positive if the stock closed this week above the five-week modified moving average of $12.25. My weekly value level for RSA is $12.12, with a monthly risky level at $13.33. Given the extreme volatility we have seen so far this week as the market reacts to earnings, this stock could go below $12.12 on a negative earnings reaction, or above $13.33 on a positive reaction.
is expected to report EPS of 32 cents per share. SanDisk designs flash storage card products used in consumer electronics such as digital cameras. My model shows SanDisk 15.0% undervalued, with a positive weekly chart profile. My monthly value level is $27.51, with my annual risky level at $29.66. SanDisk could slide to $27.51 or lower on a negative reaction to earnings, or rise above $29.66 if the market likes what it sees.
The consensus analyst earnings estimate for Xilinx is 21 cents per share. The circuit designer's products are used primarily by equipment manufacturers in the communications, storage and server markets. My model shows Xilinx 35.5% undervalued, with a positive weekly chart profile. My monthly risky level is at $28.85. Xilinx could trade back toward its recent low at $25.25 on a negative earnings reaction, given the recent volatility in the market. A positive reaction to Xilinx's report could move the stock above $28.85.
is expected to report EPS of $1.21, up from the $1.19 figure I
noted last week. Google reached yet another all-time high Wednesday, making shares 16.4% overvalued. Its weekly chart profile is positive, with a 90.0 reading for its 12x3 weekly slow stochastic; that's overbought, on a scale of 00.0 to 100.0. The five-week modified moving average provides a higher support at $285.40. What kind of earnings expectations could pull fair value up to the $350-$360 price targets talked about in the media and by some analysts? Assuming current 12-month EPS at $4.00 and an unchanged 30-year yield, projected 12-month EPS would have to be $13 or $14 to pull Fair Value up to $350 / $360, well above the $7-$8 I have heard some of the bulls touting on TV.
Looking ahead to Monday, semiconductor leader
will set the tone for the week in technology. TI, a member of TheStreet.com Technology Report model portfolio, is expected to report EPS of 29 cents per share. My model shows this chip giant 14.8% undervalued with an overbought weekly chart profile. I show a quarterly risky level at $31.86, with my annual risky level above that at $45.41.
Richard Suttmeier is president of Global Market Consultants, Ltd., chief market strategist for Joseph Stevens & Co., a full service brokerage firm located in Lower Manhattan, and the author of
newsletter. At the time of publication, he had no positions in any of the securities mentioned in this column, but holdings can change at any time. Early in his career, Suttmeier became the first U.S. Treasury Bond Trader at Bache. He later began the government bond division at L. F. Rothschild. Suttmeier went on to form Global Market Consultants as an independent third-party research provider, producing reports covering the technicals of the U.S. capital markets. He also has been U.S. Treasury Strategist for Smith Barney and chief financial strategist for William R. Hough. Suttmeier holds a bachelor's degree from the Georgia Institute of Technology and a master's degree from Polytechnic University. Under no circumstances does the information in this commentary represent a recommendation to buy or sell stocks. While he cannot provide investment advice or recommendations, he invites you to send your feedback --
to send him an email.